R&D underpinning grain’s potential

That is the view of GRDC director John Woods, who farms on Booroola near Boggabilla on the NSW/Queensland border.

Mr Woods said over the past 20 years, the grains industry across Australia had nearly doubled production with only a 15 per cent increase in the area planted.

“So the productivity of the grains industry is increasing quite well, but we still have challenges,” he said.

Mr Woods said tight profit margins and a savage cost/price squeeze meant farmers had to become increasingly more efficient.

“For an average farmer 15 years ago, it cost $1 million to grow a crop and make $150,000 to $200,000 profit. Today they need about $1.5m to make the same profit.

“So our costs are increasing but our mar­­gin has remained largely the same, and the risk to the grain farmer has increased.

“The capital required to grow a crop is a lot higher and our return is a lot less. So it is not necessarily about minimising costs – it is about cost efficiencies.”

Mr Woods said while the bottom 20pc of growers were doing it tough, the top 20pc were doing very well.

“The biggest difference is the top 20pc are adopting the latest innovations and technology.

“That is the game-changer.

“One thing where we have a lot of room to move is with technology adoption and practice change on-farm. That is what will move the bottom 20pc of farmers up to the top 20pc.”

But Mr Woods said there was already a vast reserve of knowledge and information that growers could tap into and adopt on their farms to lift production.

He pointed to the wealth of information already available on subjects such as crop nutrition, rotations, crown rot and nematodes.

“These are things we now know. We need farmers to now look at the research and change their systems to maximise their yields and productivity.

“Crown rot has been on the agenda for in excess of 30 years and we now know a lot more about it. And while there is research going on in pre-breeding to get tolerance to crown rot in wheat varieties, we could be doing a lot of things in our own systems to manage crown rot and nematodes.”

Mr Woods said Australia needed to tap into the global agricultural research world and attract greater international investment in agricultural research to our shores.

He said internationally, the large life-science companies such as Syngenta, Monsanto and Dupont spent $5 billion a year on just four crops around the world.

By comparison, in Australia, the grains industry R&D spend was just over $400 million, and of that GRDC provided $180m.

“Contrast our $400m locally with the billions spent internationally. R&D is global like it has never been before. We need to harness that capacity here in Australia.”

Mr Woods said international players did not naturally look to Australia because it had a small market and its regulatory system was different to what they were used to.

“That is where I think we have to harness the capacity of all players in the industry – whether they be the GRDC, the universities, state governments, CSIRO and other traditional partners – who have great talent.

“As an industry we need to be active, not passive, in attracting investment into Australia.

“If they are developing new products and new technology, we need to attract it to Australia at least as fast as it is accessible internationally. If we don’t do that, we lose our competitive advantage.”

AgForce grains president Wayne Newton said the farming industry had the capacity to continue to lift production levels, but was constrained by farmers being under constant pressure to maintain viability.

“One of the main issues is a general lack of farm profitability and that, unfortunately, slows down the adoption of new technologies and equipment which are important for making productivity gains.

“The high internal costs are an issue and that is part of the reason profitability has been poor.

“The cost of moving commodities for export can be as high as 40pc of the grower’s gross return. That is something that is eating a big hole in farmers’ returns.

“We need profitable farm enterprises to allow farmers to adopt new technologies. A lot of those technologies will improve productivity and profitability, but they come at a cost.”

One of the most exciting prospects for boosting grain-production levels in Queensland is the potential development of new growing areas in the north of the state, according Mr Newton.

There have been moves in recent years by state and federal governments to develop the potential for new irrigated agriculture in the Flinders and Gilbert catchments of north Queensland.

“But we have to be careful not to let ourselves be limited by the thinking of the past. We have to look to the future with new technologies, new crops, new ways of doing things,” he said.

Mr Newton said it was the role of government to facilitate that through infrastructure support.

“Certainly with some of the infrastructure constraints where people don’t have ways and means to get their crop to export up there, or if they do it is a very expensive one, government has to look at the infrastructure support to help with that. But when it comes to working it out at farm level, maybe the best thing to do is let the creative farmer have a go at it because they usually have a good way of solving these problems.”